“The biggest fund in my Stocks and Shares ISA is…”

If you’re keen to learn the largest fund position in our contract writers’ Stocks and Shares ISAs, you’ve come to the right place!

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Stack of one pound coins falling over

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

We asked our contract writers if they’d be willing to share the one fund that makes up the largest position in their Stocks and Shares ISA portfolio today.

Without further ado, here is a selection of their top long-term buy-and-hold investment funds!

Artemis High Income Fund 

What it does: Artemis High Income Fund invests mostly in non-investment-grade bonds that pay higher coupons.

By Royston Wild. I opened a position in Artemis High Income Fund earlier this year to help me de-risk my Stocks and Shares ISA.

It’s a group investment that uses the lion’s share of its cash to buy government and corporate bonds. Only a maximum of 20% of the money it holds can be ploughed into equities. 

This particular fund exposes investors to a higher level of risk than many other bond-focused investments. This is because it predominantly invests in loans that are at the lower end of the credit quality spectrum. At the time of writing, less than 30% of the bonds it held were considered investment grade (i.e. BBB and higher). 

The flipside of this is that such bonds naturally pay a bigger yield than ones of better quality. And Artemis High Income has a terrific track record of making this work for its investors. Since it was launched in 2002, the fund has delivered a return of 220%.

Royston Wild has a position in Artemis High Income Fund. 

Fundsmith Equity

What it does: Fundsmith is a global equity fund that is managed by Terry Smith.  

By Edward Sheldon, CFA. My largest fund holding is currently Fundsmith Equity. Why this fund? There are a number of reasons.

One is that it has a global focus. This means that it gives me exposure to world-class businesses listed overseas (like Danish diabetes specialist Novo Nordisk).

Another is that there’s a focus on high-quality businesses that are very profitable. This focus on quality tends to provide upside when the stock market is rising while also providing an element of protection when stocks are falling.

A third reason is that the fund has a brilliant long-term performance track record. Since its inception in late 2010, it has returned around 16% per year on average, beating the broader market by a wide margin.

Of course, past performance is not an indicator of future returns. And there are going to be times when this fund underperforms the market (it underperformed last year).

Overall, though, I see it as a great core holding.

Edward Sheldon has a position in Fundsmith Equity

Scottish Mortgage Investment Trust

What it does: Scottish Mortgage Investment Trust aims to identify and own exceptional growth companies from around the world.

By Paul Summers. Thanks to rapidly rising interest rates, growth fund Scottish Mortgage (LSE: SMT) was one of the worst performers in the FTSE 100 last year.

As frustrating as this has been, I’ve been using the (big) dip in sentiment to accumulate more shares. Indeed, Scottish Mortgage has quickly become my largest ISA holding. 

Obviously, this doesn’t mean things won’t get worse before they get better. Inflation is proving a stubborn beast to tame. 

But confirmation that major banks will pause rate hikes could yield a reversal in sentiment. And when the next bull market does arrive, I want to be invested in those companies that will shape the future of the global economy.  

This strategy isn’t currently popular, but it’s what has led to Scottish Mortgage massively outperforming the market over the very long term.  

And it’s this that really matters to a patient Fool like myself. 

Paul Summers has a position in Scottish Mortgage Investment Trust

Vanguard FTSE Global All Cap Index Fund

What it does: This fund offers exposure to over 7,000 global stocks, comprised of large, mid-cap, and small company shares.

By Charlie Carman. Few products offer the diversification of the Vanguard FTSE Global All Cap Index Fund. Investors benefit from truly worldwide equity exposure. Currently, 62% of the fund is concentrated in North America, 17% in Europe, 11% in the Pacific, and 10% in emerging markets.

Reflecting their enormous market capitalisations, Apple, Microsoft, Amazon, Alphabet, and NVIDIA are the five largest positions. As the fund only invests in stocks, Vanguard gives it a risk rating of 5 out of 7.

The fund’s breadth is the primary reason it’s my core ISA holding. I treat this as a ‘set-and-forget’ investment as I plan to hold my position for decades to come.

One downside is it won’t beat the market, due to its very diversified nature. That’s why I also invest in individual shares with a view to boosting my returns by taking larger stakes in companies that I believe can outperform this passive fund.

Charlie Carman has a position in the Vanguard FTSE Global All Cap Index Fund.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Alphabet, Amazon.com, Apple, Microsoft, Novo Nordisk, and Nvidia. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »

Investing Articles

Are HSBC shares a FTSE bargain? Here’s what the charts say!

There are plenty of dirt-cheap FTSE 100 banking stocks for investors to choose from today. Our writer Royston Wild believes…

Read more »